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Open Houses...Let's get real.

MSN REAL ESTATE has written yet another bogus article for consumers about the value of Realtors®. This one is classic...

"10 things your real-estate broker won't say

1. "Your open house is really just a networking party for me."
realtor Hire a real-estate broker to sell your home, and one of the first things he'll likely suggest is hosting an open house so that potential buyers can casually check out your property on a weekend afternoon. But while open houses are promoted as a great way of finding a buyer, a National Association of Realtors study found that their success rate is a mere 2 to 4 percent.

No matter. Holding an open house serves another important purpose — for the broker. "It gives him a database of clients," says Sean McNeill, an independent real-estate broker based in New York City who says that he doesn't like open houses, preferring to match clients with appropriate buyers. "At open houses, you get all kinds of people walking in. Some are (trying) to see how much they should sell their own places for; others just want to get a look at what's out there." All are perfect pickings for a broker looking to increase his roster of buyers and sellers. "Think about it," McNeill says. "The broker is devoting a couple hours of a weekend. He won't do that unless it helps him in a big way." But it doesn't necessarily mean that a seller should forgo an open house altogether — "It's still a real good way to showcase your house," McNeill says."

First, the 2 to 4 percent statistic is completely manipulated. I agree that open houses are not necessarily a buyer gold mine, however, there are agents who consistently do well at open houses. I am not one of those but my wife is! As Real Estate professionals, we pick our strong suits and offer those services to our clients. For MSN to imply that we all offer open houses to all of our clients for strictly self serving means and, further, misrepresent our intents is nothing more than a form of media sensationalism. In fact, I know of very few Realtors® who even recommend "opens". Those that do encourage "opens" are the ones who have found success at them and put the required energy into them.

Second... If, in fact, an open house is a "networking party" as MSN maintains, I can think of nothing better for the client. If people are walking through a client's home and networking, how is that a bad thing?

Third... Then the author wraps up his opinion by saying, "It's still a real good way to showcase your house." What? I thought he just got done saying it doesn't work and it is self-serving?

Oh well, enough ranting. I've got some GREAT price reductions to work on. (I wasn't even going to post a blog today!).

Kent Anderson, REALTOR

Coldwell Banker Resort Realty, Schweitzer Mountain

Sandpoint, Idaho 83864

Cell: 208-610-1201

Email: ski7b@coldwellbanker.com

SCHWEITZER AERIAL

Posted by Kent Anderson on 09/29/2009 12:03 PM

Comments (72)

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72 Comments on Open Houses...Let's get real.

SEP

Well it must be true because some first year intern working for MSN said so. I just love these deals where someone who has no idea at all what they are talking about is giving advise. Next he will be giving advise on how to build a rocket. Next week he will be an ecpert on what medicine you should tell your doctor to prescribe to you. I just love these " experts ".

Let me just say, this is not what I wanted to read, I am doing an open house this Sunday, LOL. I will let you know what happens. I am doing it for the sale of the home, I am weird. I am not doing it for me.

Barry - Everyone can see the junk out there in the media yet it still just proliferates into our lives. I guess that's why I like AR. It's real.

Andrea - Good luck at your Open! Careful, though, you don't want to network. MSN implies that's a bad thing.

I do open houses mostly for the networking. People driving by have no idea of the price of the house or what they qualify for.

Gene - Yup. Without networking, we have no career.

If, as a realtor, networking at open houses helps you meet new people and help them become buyers, it's true that it may not help that particular seller. But it does bring more buyers off the fence and into the market, helping all the sellers out there.

Good luck with your open houses everyone.

Simon

Hi Kent. It does not surprise me that some writers contradict themselves LOL I enjoy hosting open houses irrelevant of what some writers think they know.... ~ Lana

I've held open houses for weeks upon weeks and never had anyone come by...some networking.

I have also done them where a neighbor has come by and looked at the house for a friend. I think they work, it's just another way to showcase a home.

David - It is definitely a crap shoot, especially up here in North Idaho. For some reason my wife (who is also a Realtor) hits home-runs off of hers...go figure.

Simon - Thanks for stopping by. Lots of new faces with this blog. Good to see you here!

Lana - Writing is an art...you would think someone who does it professionally would have his act together. Thanks for the response!

I am so glad you wrote this post. I read that yesterday and wanted to do bodily harm to the writer who must be an idiot!!!! Maybe I will post on some of the other crap that came out of his keyboard. Why would someone who thinks like that be assigned to real estate???

Kent,

I used to feel that open houses were a waste of time especially for the seller until I had one and invited people who were walking out of another open house to come and they bought the house. I was really a heroine to my seller in that sitution.

I have sold many houses from open houses and so have my agents. It just depends on the house (location, etc.)

Kent,

I invite neighbors to Open Houses because they take all the fliers anyways and want to see the house. They love their neighborhood have a vested interest in who moves in. Let's not forget a new listing is the talk of the neighborhood and everybody knows somebody so why not let them see the house. That way they can tell their friends first hand about the house. See it's not all about us!!!

Just another incidence of the media fueling the paranoia of the general public. I love doing open houses but more often than not the attendance is very low. Then the open house becomes a photo shoot so I can post new photos to try to attract more interested parties. Not much networking in that.

Do people actually buy a house they tour at an open - not often, although I have written a couple of offers over the years. Besides marketing for the agent - an open house focuses attention on the home by having additional signs and traffic. It also give the neighbors a chance to come look and sometimes they end up being your best sales people because they already like the neighborhood and have friends and family that they will tell about the house.

Is this the best way to sell a house? No - but it can help get the home sold maybe - and as agents we should try everything to get the job done.

Kent,

It's all about getting feet through the house. Does every house sell through an open house? No. But there enough that do to make it another tool in the Realtors toolbox.

Rich

There is definitely an art to a successful Open House. From preparing the home, inviting potential clients and other agents/brokers, and marketing the open house, there is quite a bit a skill involved. Even then, some homes just do not qualify as a good home to have open.

I will say that the more warm bodies you get into your listing, you better your chances of selling it and picking up those potential buyers as clients. I think it is a win-win situation for the agent and the seller if the open house is conducted properly.

For some reason I tend to be an open house magnet. I held one two weeks ago with nothing more than an ad in the paper and had 22 people come through. When you have that kind of traffic in a two-hour period, you are herding cats, not networking. Still, it's good for me to hear from visitors what they like and don't like about the house, what stands out as a negative, etc. This feedback helps me market the house more effectivel for the sellers.

As for the writer, this is probably recycled content from another source. As I always say, never let the facts get in the way of a good story!

Yet another reason why I don't care for MSN. This just further supports my theory that open houses don't sell homes. Every once in a while I get lucky but more often than not, what I get is nosy neighbors!

Great post! By the way, here's the link to the article you referenced: http://realestate.msn.com/article.aspx?cp-documentid=21755590

Advertise and market -- online (Craigslist, Trulia, openhouse.com, property website, if you have one); send flyers out to the neighborhood; put signs everywhere (I put out 10 on my last OH) and you will get plenty of interest -- maybe not always THE buyer -- but the house will get exposure and those coming through may tell friends and relatives. Have the attendees take an extra flyer to give to someone who might be interested if they are not.

I wrote a blog yesterday about another comment I found on MSN about realtors it seems they have a habit of this.

Hi Kent - I saw that article and I had a similar reaction. I have had a lot of success with open houses. Sure, I do get buyers and sell them other homes, but I also get lots of prospects for the house I'm holding open. In fact, I have an escrow closing tomorrow in which the buyer came to my open house. I'd estimate that my clients come about 1/3 from blogging, 1/3 from referrals and 1/3 from open houses.

The tricks to a fun and successful open house have been covered in a few posts I have written on my blog. I do enjoy them and so do my guests.

So there, MSN!

The problem isn't MSN. The problem is some of the realtors. Period. When realtors go out and brag about how many clients they "picked up" at an open house, therein lies the problem. If that is truly the only reason you are holding an open house, then it's not to the benefit of your client. If the right reasons are tangled in there as well, then you have a good realtor who will do a host of different marketing techniques to get the house sold!

Hi Kent -- Because there are no reliable statistics, they could be in the ball park. My networking with agents and my own experience says these #s are pretty accurate. That said, I tell sellers the # main benefits of an open house are to:

Brand the real estate brokerage. The ad in the paper, realtor.com, etc.
Brand the listing agent.
Future business for the listing agent. Neighbors, potential buyers and lookie-loos stop by providing fertile ground to develop a relationship with future buyers and sellers.

If I were a savvy seller I would ask the listing agent: Please tell me the # of open houses you have held and the # of homes that you have sold through these open houses.

Open House Success % = # of # of Houses Sold Through Open Houses / Open Houses Held.

One may hold a specific home open 1..n times, so if a home was held open only once versus 10 times, the probability of that home selling via an open house would be less.

Another mostly unanswerable question is: Would this buyer have seen the home had it not been held open through their buyer's agent or a direct call to the listing agent? That's impossible to answer, but will further diminsh the success %.

Me, I sold one home through a broker's open where a consumer stopped by, so it wasn't even an open house.

I would venture to guess I have done in the neighborhood of 400-500 open houses in my career, so 1 / 400 is one-quarter of one percent.

Even the agents I know that have sold a few homes through this technique versus the # of homes they have held open, I can't imagine it would be higher than a few percent at best.

The next question a savvy seller should ask:

What is the # of clients you have obtained via open houses? Or what is the ratio of clients you have obtained from open houses versus homes sold via open houses? Is it 2:1, 3:1 or even 10:1. I bet the Ratio is in the neighborhood of 10-1. Those are about my stats.

I tell sellers this up front and say it certainly can't hurt, but price, condition, location and demand are the main drivers, plain and simple. Some houses practically sell themselves, most are in the middle, and the small percentage of homes at the bottom of the buyers' desirablility you could spend 50K marketing them and hold them open 48 weeks out of the year and they won't sell.

In short, I say more power to listing agents who believe in them, if you sell them that way and your sellers as a whole are happy, great.

I think the short answer is timeless: If a buyer is truly in the market, they are working with an agent, as the MLS is a closed database/system and an appointment will need to be setup. The buyer will survey homes in their price range and communities, pick one and it sells.

When I hold a house open, it is for the purpose of highlighting the features of that home to potential buyers. I certainly do try to position myself as a resource for those that do not choose to buy that particular house. And call me weird, but I actually enjoy chatting with the nosy neighbors.

Kent Over the past 34 years I have read more articles disparaging realtors than I care to admit - don't waste your time being concerned - we're still here Art

The least they could do is be consistent. It is either a good idea or a bad idea... you don't say it is a crappy idea... but here are the great reasons to do it.

This is just a rehashing of the same content that is posted every few months. Agents who can educate their clients and show value should have no problems overcoming this.

This is a typical example of an individual in the media standing on a soapbox and broadcasting his/her opinion. Like Art said, non-sense like this goes in one ear and out the other. I like doing open houses n to meet prospective buyers. It helps me keep a pulse on the market - seeing how many people attend, the conversations I have with the people who stop by. It helps me get an idea of what people want/need in a particular area. Many seller's know deep down that open houses may not sell the house, but they do appreciate them being done. The last listing I sold, the buyer came to my open house. He already had an agent, but who knows if he would have come by had I not help it open!?!

I love doing open houses, and since I don't have any of my own, I fill my open house time by doing open houses for other agents with my company. Maybe that's why all the other agents love me! LOL

I don't mind holding open houses - it is an opportunity to meet people and gain knowledge about that particular neighborhood.

Kent... Do you remember the Jane Curtin & Gilder Radner Skit (SNL) when Gilda...rants about some unknown issue, and it turns out she miss heard the whole thing...and Jane brings her up to speed, Oh Sorry Never Mind!! If MSN is going to make a point...they need to defend the point? Even when they are totally wrong!!

In my many years in sales with the past decade being a Realtor, there is not one thing that always generates the business. I have sold properties via an open house by people who found it by the sign, advertising and agnets sneding the buyers. Many buyers have found the properties on their own because it was outside one or more of the parameters they gave there agent, saw it online and decided to look.

My clients hire tofo 100% and open houses are a part of that.

In my area people like to look at open houses. It is a nonthreatening way to find out about the real estate market. Yes, I have picked up buyers at open houses and it gets the word out about the listing and the listing Realtor. Three times in the past two years. a buyer attending an open house has ended up buying the house that was originally open. I have had people want to know about another house that they had seen. What's wrong with have a open house format that gives customers/clients the information they are looking for and an easy relaxed way to get it?

Wow, a networking party, guess they never worked in real estate. We actually just sold a house to someone who saw it because of an open house, and almost sold another one due to an open house. Holding Open Houses is just one of many tools used to get results in real estate.

I have sold several homes as a result of the open house. more recently. sold to a neighbor's daughter, and had an open house last week.. 3 same day offers!

The last two properties I've gotten into contract were from open houses. I can testify that open houses work if you do them properly.

David - Garbage in- garbage out, right? Good ole MSN. They are pretty good at that.

Sybil - I'm glad it worked for you, finally. I'm still batting zero but I do feel there is value for all parties when holding an open. Thanks for stopping by!

Julie - You sound like my wife. She's made a career out of selling homes off an "open".

Linda - Great point! Never discourage neighbors from viewing your open. They can become your greatest advocate for selling the listing.

The great debate continues.... My partner has sold several of her listings sitting open houses - she is fantastic at it! I on the other hand tend to pick up buyers and have never sold a house I sat open ... and I have sat many of the last 8 years.

Kathryn - That's the thing about opens. If it is slow, it can translate to some much needed down-time. When the market is slow, I know I'm working longer hours than ever. We don't want to get too consumed by our career. How about this...a slow open is a super time to blog on AR. Thanks for checking in!

Michele - Very logical approach. I agree.

Richard - I like the toolbox reference. I even posted a blog about our toolboxes a while back.

My business partner and present all of the marketing methods we use during our listing presentations. We note the rates of success in selling a home next to each method. Although many of the methods only garner single digit success rates we point out to the sellers that in aggregate these methods account for as much as 25% of home sales. Then we ask, "would you like us to forgo that 25% of the market". Little things DO matter. Good post and best of luck to you.

Writers have to write something and it has to be controversial. We read it so it worked!

Mathew - I agree! It is always a win-win if you use your time wisely.

Marcy - Those report card comments from the visitors are a VALUABLE resource!

Unfortunately Kent I would have to agree with the Author of this post. When you say your wife does well at them are you saying that she often sells the home she is holding open? If this is the case she is one of the fortunate few. Generally speaking a public open house is a waste of time for the homeowner and more of a benefit to the Realtor.

I guess I would ask this question...If the open house was not held would a legitimate buyer not schedule a showing with a Realtor? I seriously doubt it!!!

Chris - Thanks for the well though out comment. Heck, your comment was longer than my post! I agree with you. I will add, however, there are a fair number of buyers out there who do not know they are buyers yet. They walk into a random open house out of curiosity and next thing they know, they are looking at changing their lives. I actually was one of those people a few years back. Thanks for the comments!

I did an open house two weekends ago. Had only 2 sets show up. One of those came back the following day with their agent and put in a contract that night. Now, we're under contract and moving forward.

Would they have eventually seen the house without the open house? Who knows. But they just lost out on a house, was ready to find something, walked into ours and wah-la.

Hey Bill - Leave it to you to post the only contrarian view so far. Actually, your point is well taken. I do not love open houses but I can appreciate their value to all parties. ...and, I do believe potential buyers do happen upon a house that they would have passed up on an MLS search...especially if their agent was a little less than thorough. I would guess you would be one of those agents that would have blanketed the market for your client...that is to your credit. Always good to hear from you!

Bev & Bob - Congratulations! I love that. Bill, are you listening?

I don't think any effort we ever put out to either sell the home or network is wasted. It's always a good thing just to be trying to make things happen. It keeps everyone moving in a positive direction.

It's always interesting to see how the press can skew our profession. I think when they don't have any news for the day, they decide to pick on Realtors!

Kent: Although the market was much better in the year 2005, I sold 4 houses where I was holding an open house. It also helps to have a lender who works on Sunday also.

Kent,

I certainly agree that in many areas the primary purpose of an open house is for the realtor to pick up potential clients but it most definitely serves a purpose for the seller. I agree that the 2-4% just doesn't seem accurate but my guess is that they're not including buyers that already knew of the listing from the realtor, MLS, etc and are talking only of true walk ins. When I'm holding my own listings open and can't show my buyer clients, I alway check to see if there's an open house and send them off for a look. How can having an open house be a bad thing when all it takes is the right person to walk through?

Hey I've hosted open houses and a few days later gotten a call from one of the attendees that they want to write an offer...so you never know.

Wow, should I let MSN know how wrong they are about EVERYTHING they write about. ha ha I've sold houses from open houses, and I get a ton of buyers. What are we doing this for? To sell houses and get buyers.

SEP

Christopher - That's the bottom line...are you a people person or not. If not, being a realtor® can be a challenge. Sounds like you have the bases covered.

Keith - Technically, you can bet 2-4% is pretty accurate...maybe even high. The problem is that 2-4% is skewed. What is the success rate of Realtors who enjoy opens? Probably much higher.

I think as a listing agent that you should have a comprehensive marketing plan and try to reach as many potential buyers as possible. I don't think you should put all your eggs in one basket, and that you have a duty to your clients to do a variety of things to help showcase their home and that open houses should be one of them. However, I feel they should be done conservatively. I don't believe in holding the house open weekend after weekend. When you do this, it can make the house seem stale or undesirable. You should plan it out and know what's going on in the community and schedule it when you may have the best traffic and that's not necessarily from 1-4 on Sunday. I have lots of other ideas on open houses and will save them for one of my own blog posts.

I do think it is valuable to the Realtor and the Seller. I will, say, however, that if open houses sold homes, then FSBO's would be able to just hold one and wouldn't need us, but we all know it's not that easy and those FSBO's usually find that out after weeks of those open houses.

I have sold a few of my listings from the actual open house, and I have picked up many clients as well, so it does help both the Realtor and Seller and I really don't see a problem with that. I am honest with my clients and let them know what their expectation of an open house should be and that it is to showcase their home, let the neighbors become familiar (and have them spread the word about the home), and to hopefully find that 1 buyer we are looking for. They understand it may or may not produce that 1 buyer, but we will try.

Kim Darling

I don't do a lot of open houses, usually one per listing, but you never know - for each listing, you just need ONE buyer - maybe he/she will walk in the door.

I think open houses work. Well, at least for me they have. These writers just like the controversy.

I subscribed to MONEY magazine for years, until they ran a very negative article on realtors and how we were all screwing the public. I cancelled my subscription immediately. It was not just biased, it was bashing. The media loves a good negative story.

I do hold open houses on Sundays, typically. This past weekend I had a family stop by my open house. They were driving by and had seen the sign. Ended up they are great prospects for this property. Yes, I may pick up some clients, but my main concern is getting people into the house who might not be working with an agent or who have enough interest themselves to want to see the inside. Bottom line is I want to sell the house. Open houses are just one tool among many...

Open houses are a very expensive social networking hobby.

In all the time since I've had my license back in the '80's, I've never seen an open house get sold from the event.

LOL @ Barry's first comment at the top of the list...too funny!!

Most marketers will tell you that 2 to 4 percent would be a great rate of response to any marketing or direct mail campaign.

So why is this a bad thing in real estate?

I tend to do pretty well at open houses, and even if I don't double end them, I sometimes find that it gives buyers with an agent the opportunity to see the house when they might not have otherwise.

OCT

Christine - Thanks for stopping by and continued good luck on your opens!

Terry - Great point!

Clint - Agreed! I liked that.... especially as the first response.

Mike - Very few sell at the event, I agree. But how many are sold down the line as a result of the Open?

OCT

Kent - I read this or a similar article. It assumes that agents hold open houses only for their benefit and not for the benefit of the owner. In reality, we hold open houses at the request of our clients at specific times in the listing. For example, we hold it open 2x during the first 30 days and then 1x after each price reduction. Contrary to the article, we have sold homes as a result of open house. Like any marketing activity, it often depends how you prepare for it - open houses are no different. We promote open house via the internet and the occasional e-blast to anyone in the database looking at a specific area in a specific price range. We also contact neighbors. In each case, we are trying to leverage the exposure of this property and get it sold. Believe it or not, but there are people who don't like real estate agents and find open houses less threatening than scheduling an appointment to see the home.

Hey Ryan - Thanks for the thoughtful response. You are exactly right. There are a lot of people who want to keep an arms length away from Realtors. That is the case with sales people in general, however.

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